Wednesday, July 20, 2016

Colgate-Palmolive: Dividend Growth Will Disappoint

Colgate-Palmolive Dividend Stock Analysis 2016
Colgate-Palmolive Dividend Stock Analysis 2016
In my quest to build my portfolio of dividend growth investments one of my favorite industries to invest in is the consumer staples. Consumer staples provide a stability to the portfolio due to the steady nature of the business. Consumer staples don't have their operations fluctuate too much just because the economy is going through a rough patch. Likewise, they don't typically boom forward when economic growth springs back to life.

It's the stable nature of these businesses that lets them amass lengthy dividend growth streaks and makes them the foundation for many investors' portfolios.
Colgate-Palmolive (NYSE:CL) falls squarely in the category of consumer staple and is one of those companies that has always eluded my portfolio due to valuation or available cash. Colgate-Palmolive has increased dividends for 53 consecutive years giving them the title of Dividend Champion.
For some perspective 53 years ago was 1963. That's when Martin Luther King gave his "I have a dream speech", JFK was assassinated and The Beatles were just beginning their thrust into worldwide superstars.
Let's take a look at what makes Colgate-Palmolive so great and value the company using a discounted cash flow analysis.
Continue reading the article on Seeking Alpha.

Seeking Alpha - Colgate Palmolive Dividend Stock Analysis 2016

2 comments:

  1. CL is an awesome long term hold and has been with me since I became a dividend growth investor. Sure growth is nothing stellar going forward but I like the stability of the business and most consumer staples as you already know. CL still has some good growth opps abroad. Thanks for sharing and giving perspective about what 53 years really means.

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    1. DivHut,

      Love the consumer staples for the same reasons you do; however, CL might have some big problems generating dividend growth. Their cash flow is going to be extremely tight unless they get a big tailwind from a weakening USD which might not happen anytime soon if a recession or global economic hiccup is right around the corner. That will just lead to investors flocking to the USD for safety. Solid company but investors expecting 10%+ annual dividend growth are likely to be disappointed.

      Thanks for stopping by!

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